You talk about stagflation as it was mythical problem in it of itself not a symptom. What was the symptom pointing too?? Again, I think the problem we faced have been faced before. We act as if this is unprecendeted, as if its the end of the world. It can be if we want it too, if thats the end game and I believe there are those in powers who are trying there best to restructure the nation, as they did in the 1930's or as they attempted in the 1970's What industries, will replace these, Fire Industry, or retail, or humveess who cares? That's not or job to figure out that's the job of the entrepreneur . The one industry forgotten in the stimulus bill. Government has no clue what the future brings. It's the entrepreneur that will build the future industries. Apple and Microsoft were started during a terrible time. Inspite of Jimmy Carter, Nixon, high inflation, Vietnam. They believed in themselves and they believed in free markets. If we lose that spirit then..we are done for.
Makloda is right: the answer isn't protectionism. Imo the answer really lies in forcing China to slowly unpeg their currency which will then in turn force us to do some things that we should have done years ago. And I emphasize "slowly" so that the entire universe doesn't implode. But the whole currency peg thing is very dysfunctional imo. It has served its purpose and now its time to move on...
Nicely worded. If you think about it, the idea of "protectionism" is strictly defensive. America's strength has always been in its offense, not its defense. I have always said let us compete. But, again, you have to have a level playing field and currency pegs is not an example of that. Look how well some of our SnP exporters have done of late once the dollar got a little more in line. Imo that needs to happen a little more but very gradually...
It's not his jowls that were big. It was his cajones. He's one of the few central bankers to stand up to the politicians, his fellow bankers and scores of Wall Street types. There's a few around the globe that are cut from the same cloth - Mexico's central banker is another example - but they are few and far between. Every once in awhile, there's a person who just does what's right no matter what the cost or loss of personal gain...
My take is I worry about protectionism making industries less competitive. However free trade is a myth. . asia has grown through domestic protection of its markets and export targeting. In exchange we try to get some countries to respect our copyrights and buy planes from boeing. Its all a giant jumble of politics. The problem is govt is corrupt.
I don't think it's corruption overall. I think that this is all being orchestrated. I don't mean in a wacko conspiracy sense, but I think that growing the rest of the world has been a strong financial goal of the elites for decades now. They have struggled as to how to do it a la the latin american banking crisis and China's Most Favored Nation status, etc. But the goal has very clearly been "interdependence" as they like to call it. And this isn't all bad by the way. As I have said before, interdependence will probably save our neck someday from terrorism, regional wars and the like. It's not all bad even though it's being forced upon us...
Btw, isn't it ironic that one of the few legitimate functions of government - to regulate and stimulate economic activity - is one of the few functions that they almost universally do not touch (in the US at least)? The politicians will jump in and bloat our economy with nonproductive spending, deficits and other nastiness and overregulate with things like SOX, but the one thing they could do to help the mess they've created they completely ignore! Again, though, I think a lot of that has been deliberate...
Agree free trade, as idealized in the last decade is a myth. We should strive for competitive trade and free trade where possible. However, arbitrarily limiting trade simply in defense of the industry Du Jour is plain stupidity. No doubt many of our trade partners in Asia are not playing by the rules and we should be aggressive about making sure they do. But we cannot fear competition.
Same is true for government efforts to spend their way out of recessions, yet you seem to have no problem supporting that point of view. I put to you your same question: when in history has this ever worked? If you can give even one example, it would be helpful to explain your thinking.